This study investigates the effect of sustainability reporting on the financial performance of listed non-financial firms in Nigeria, with particular emphasis on environmental, social, and governance (ESG) disclosures. Drawing on stakeholder theory, the study examines whether ESG reporting functions as a value-enhancing strategic tool or remains a compliance-driven obligation within Nigeria’s emerging market context. Using an ex-post facto research design, a balanced panel dataset of 76 listed non-financial firms over the period 2010–2024 was analyzed. Financial performance was measured using Return on Capital Employed (ROCE) and Profit After Tax Margin (PATM), while sustainability performance was captured through a disclosure index covering environmental (ENVD), social (SOCD), and governance (GOVD) dimensions. Panel regression techniques, including fixed-effects and random-effects models, were employed to ensure robust estimation. The results revealed that environmental and governance disclosures have no statistically significant impact on either ROCE or PATM, indicating that these dimensions of sustainability reporting remain largely symbolic and compliance-oriented in Nigeria. Social disclosure, however, exerts a significant negative effect on PATM, suggesting that social investments impose short-term profitability costs without generating immediate financial returns. The study concluded that sustainability reporting in Nigeria has not yet evolved into a strategically embedded driver of financial value. It recommends stronger regulatory enforcement, improved disclosure quality, and greater investor awareness to unlock the long-term financial benefits of ESG practices.
Abolore et al. (2026) studied this question.